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Cerner to buy Siemens health IT business for $1.3B

The next round of health IT consolidation is on. Today, Cerner confirmed the rumor that had been swirling for a couple of weeks, that it will acquire Siemens Health Services, the health IT business of Siemens AG, for $1.3 billion in cash.

Cerner and Siemens also announced a strategic alliance to, according to the press release, ” jointly invest in innovative projects that integrate health IT with medical technologies for the purpose of enhancing workflows and improving clinical outcomes.” Each company will commit as much as $50 million to the alliance over the next three years, with an initial focus on integrating images and medical devices with EHR data in cardiology, Cerner says.

The device integration should come as no surprise. In healthcare, Siemens has always been, first and foremost, a medical device company. Health IT came later, by virtue of Siemens’ acquisition of Shared Medical Systems in 2000 for 2.1 billion. (Adjusting for inflation, that deal would cost $2.9 billion today, meaning that either Siemens overpaid in 2000 or the health IT assets lost more than half their value in the past 14 years.) Cerner has been selling medical devices for integration with its EHR products for several years, but nobody has confused Cerner for a device company. The two companies should complement each other well in this regard.

It’s no surprise that Siemens wanted out of the health IT business, either. Cerner and Epic have been dominating the enterprise EHR market in recent years, winning all kinds of replacement and upgrade business from health systems that previously had used Siemens, GE Healthcare, Meditech and Eclipsys technology.

Eclipsys, of course, merged with Allscripts in 2010, in a deal also worth $1.3 billion, and the combined company struggled to the point that the board forced out several top executives two years later. That was the last major acquisition in enterprise health IT until today. I don’t expect it to be the last, though I won’t predict anything other than that Epic will continue its strategy of growing organically and that many companies, particularly ambulatory vendors, will drop out rather than pursuing federal certification to the 2014 standards.

The market has been shaping up to be a battle between Cerner and Epic for a while, though the formation of the CommonWell Health Alliance a year and a half ago — now including Cerner, Allscripts, Athenahealth, Greenway Health, McKesson, Sunquest and CPSI — shows that Epic is everybody else’s No. 1 competitor.

Cerner and Siemens say the deal should close early next year.

 

August 5, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Docs, stop whining, start e-prescribing

The whining is getting old.

Per Surescripts, in 2012, the latest year for which statistics are available, about 69 percent of physicians nationwide used e-prescribing technology in one way or another, and 44 percent of all prescriptions written nationwide were routed electronically. (That report came out in early May 2013, so expect some new numbers soon.) Both are up substantially from the previous year, probably due in no small part to the Meaningful Use EHR incentive program, which does require a minimal level of e-prescribing.

But what about the holdouts? A recent article in the journal Perspectives in Health Information Management found that cost remains the No. 1 reason why physicians still haven’t ditched the paper prescription pad in favor of electronic prescribing.

“While e-prescribing offers many benefits, not all providers have been excited about implementing e-prescribing systems. A major barrier, reported by more than 80 percent of primary care physicians, has been lack of financial support. New technology requires training and information technology support for installation and upkeep. A practice must take these costs into account when deciding whether to implement an e-prescribing system and also when choosing a stand-alone system or one that is integrated into an EHR system. According to the Health Resources and Services Administration, in a 2007 study the total cost of implementing an e-prescribing system was found to be $42,332, with annual costs after implementation of about $14,725 per year, for a practice of 10 full-time equivalent psychiatrists,” the authors reported.

Yes, but the paper also says this: “E-prescribing improves the efficiency of the prescribing process. Though the actual entering of a new prescription takes about 20 seconds longer per patient than writing a prescription, this time is offset by the time saved because of the fact that less clarification is needed for electronic prescriptions. Prescribers spent more time on the computer, on average an extra 6 minutes per prescriber per day or an increase of 20 seconds per patient when seeing 20 patients per day. If implemented correctly, e-prescribing should cause little disruption in the workflow of ambulatory care settings.”

In other words, those resisting the switch are being penny-wise and pound-foolish.

Besides, e-prescribing systems don’t have to cost that much. In fact, they don’t have to cost anything. Allscripts offers a free, standalone e-prescribing system online, while PracticeFusion, DrChrono and Kareo have e-prescribing modules in their free EHRs. A startup named ScriptPad has an e-prescribing app for Apple iOS that’s free to prescribers; transaction fees get billed to pharmacies. I can’t vouch for the efficacy of any of this software, but cost doesn’t have to be an issue.

I think the real problem here is intransigence. Some doctors simply don’t want to get with the times, and the only losers are patients.

April 24, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Athenahealth-EHRA news significant only that it shakes up the status quo

By now, you’ve likely heard the news that Athenahealth has decided to quit the HIMSS EHR Association. As Athenahealth’s Dan Haley put it in a blog post: “At the end of the day, athenahealth left the EHRA because we never really belonged there in the first place. The EHRA was founded in 2004 by a group of EHR software vendors. Today, a decade into the age of cloud technology, the EHRA is still dominated and governed by a group of EHR software vendors.”

Athenahealth long has billed itself as a services company, not a software vendor, going so far as to hold a jazz funeral for the “death of software” at HIMSS13 in New Orleans. Athenahealth didn’t join the EHRA until 2011 anyway. It sounded like a bad fit.

I contacted Athenahealth, and was told that the company remains “fully committed” to the CommonWell Health Alliance, a coalition of health IT companies — also including Allscripts, Cerner, CPSI, Greenway Health, McKesson and Sunquest Information Systems — that came together for the stated purpose of “developing, deploying and promoting interoperability for the common good.” (There’s also the unstated purpose of fighting the dominance of Epic Systems.)

Athenahealth is staying on the interoperability path, but as is befitting the corporate culture, is going rogue when it comes to EHRs. It’s not the first time. It won’t be the last time, because it’s not like most of the other vendors/service providers, if for no other reason than CEO Jonathan Bush doesn’t fit the buttoned-down model of an executive. For that matter, neither did his co-founder, Todd Park, whom I often called an “anti-bureaucrat” during his time with the federal government. Park’s brother, Ed, is COO of Athenahealth, and also has unconventional tendencies.

I can relate to this mentality in a way. I quit the Association of Health Care Journalists years ago because it didn’t feel like a good fit for me. That group tried to include health IT in its programming, but it really was an organization for consumer and scientific reporters, not those of us in the business and trade press. Eight years later, I still don’t think the national media are doing such a great job covering health policy or explaining the nuances of this complicated industry. And, as I’ve said many times before about healthcare, the status quo is unacceptable.

 

April 23, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

CEO, COO leaving is ‘exciting’ for MModal?

Did you catch the news this week about the shakeup in the executive suite of transcription and clinical documentation service provider MModal?

The Franklin, Tenn.-based company, formerly known as MedQuist, announced Tuesday that CEO Vern Davenport has “chosen to leave the company,” as has COO Amy Amick. In their place, MModal named Duncan W. James, formerly of QuadraMed, as the new CEO and promoted CFO Ron Scarboro to COO. Finance VP David Woodworth takes over as acting CFO. In addition, MModal brought in Graham O. King, ex-head of both Shared Medical Systems — now part of Siemens — and  HBO & Co. — cleaning up a scandal at the latter company prior to its 1999 takeover by McKesson — to fill the newly established position of chairman of the board.

In a statement, Greg Belinfanti of MModal owner One Equity Partners said, “This is a very exciting, positive period for MModal as it continues to grow and increase its presence in the healthcare industry’s important clinical documentation segment.” Say what? You just lost two of your top three executives for reasons you aren’t disclosing and it’s an “exciting, positive period” for the company?

The only thing I can guess is that Davenport and Amick might be working on a new venture together. The two were both executives at Misys Healthcare Systems — Davenport as CEO — in 2008 when that vendor merged with Allscripts. For what it’s worth, at least two other top Misys people, namely Paul Edge and Michael Raymer, remain at MModal, as far as I can tell from their LinkedIn profiles and from MModal’s current list of executives. Stay tuned.

June 7, 2013 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Breaking: Allscripts fires Tullman, hires former Cerner exec Black as CEO

Allscripts Healthcare Solutions today gave into considerable investor pressure and fired CEO Glen Tullman. Former Cerner COO Paul M. Black has been named CEO. Lee Shapiro has been removed from his position as company president, but will stay on as a consultant to Black for as long as six months, the company says.

Allscripts also said that this decision ends the company’s “evaluation of strategic alternatives.” This means there will be no sale or merger.

Here is the text of the press release:

Glen Tullman Steps Down as CEO and Board Member
Board of Directors Concludes Evaluation of Strategic Alternatives

CHICAGO, Dec. 19, 2012 /PRNewswire/ – Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) today announced that it has named Paul M. Black as its President and Chief Executive Officer, effective immediately.  Mr. Black is the former Chief Operating Officer of Cerner Corporation and is currently an Allscripts board member.  He replaces Glen Tullman, who will step down from his positions as Chief Executive Officer and board member.  Lee Shapiro also will step down as President, effective immediately, and will serve as a consultant to Mr. Black for up to six months.  In addition, the Company announced that the Board has formally concluded its evaluation of strategic alternatives.

“We want to thank Glen Tullman for building Allscripts into one of the leaders in the evolving healthcare IT industry,” said Dennis Chookaszian, Allscripts Chairman of the Board. “Glen began at the Company in 1997 when it was unprofitable, turned Allscripts around and achieved record revenues and profits in 2011.  Along the way, Glen also grew the workforce to more than 7,000 employees. I also want to thank Lee Shapiro for his many important contributions to Allscripts, particularly with respect to our M&A strategy and international expansion.”

Commenting on the selection of Paul M. Black as President and CEO, Mr. Chookaszian said: “Paul possesses a unique blend of operational, healthcare and IT sector expertise, and we are pleased that he has agreed to lead the Company at this critical juncture. Paul’s deep domain expertise in healthcare technology, industry relationships, and understanding of Allscripts’ solutions and client base make him the ideal choice.  Together with our recently appointed Chief Financial Officer Rick Poulton, we are confident that we have a leadership team in place that can execute on our strategic initiatives, capitalize on the many global opportunities that lie ahead, and lead Allscripts through its next phase of growth.”

Commenting on the strategic alternatives process, Mr. Chookaszian stated: “The Board conducted a thorough and rigorous review of strategic alternatives.  The Board concluded, however, that the best course at this time is to develop Allscripts’ long-term potential under the direction of our new management team.”

Incoming Chief Executive Officer, Mr. Black said, “I look forward to building on the many successes achieved by the Allscripts team.  Without underestimating the challenges ahead, we have compelling open-platform solutions, an impressive global client base, and a very dedicated and talented team.  We will improve the execution of our strategic vision, deliver on our worldwide client commitments, and continue to innovate. Our focus will be on creating long-term value for our shareholders.”

Glen Tullman added, “It’s always been Allscripts’ goal to revolutionize healthcare and I am proud that Allscripts’ employees have moved this industry forward in both the US and abroad – enabling more people to access our healthcare systems, adding thousands of jobs, and developing an industry that will be one of the biggest

future growth engines of the U.S. economy. Allscripts’ team has shown great resilience and dedication, and I appreciate their hard work to build Allscripts into a leading provider of clinical software, connectivity and information solutions. I am confident that Allscripts is in good hands and has a bright future ahead.”

In addition to currently serving as an Allscripts board member, Mr. Black has served on the Board of The Truman Medical Centers for 12 years, most recently as Chairman, and as a director of Haemonetics Corporation (NYSE:HAE), a global healthcare company dedicated to providing innovative blood-management solutions.

Mr. Black spent more than 12 years with Cerner Corporation and retired as its Chief Operating Officer in 2007.  He helped build Cerner into a market leader in healthcare information technology solutions with more than $1.5 billion of annual revenues. For most of his career at Cerner, Mr. Black was Chief Sales Officer, playing an instrumental role in the company’s double-digit organic growth.  Prior to Cerner, Mr. Black was with IBM from 1982 to 1994, in a number of senior sales, marketing and professional services leadership positions. Since 2007, he has been a Senior Advisor with New Mountain Capital in New York and served as a Director with several New Mountain portfolio companies.  Mr. Black recently has served as an operating executive with Genstar Capital, responsible for expanding Genstar’s healthcare and software practices, with specific focus on healthcare technology.

He received a B.S. from Iowa State University and an MBA from the University of Iowa.

Conference Call

Allscripts will conduct a conference call tomorrow, Thursday, December 20, 2012, at 8:30 AM Eastern Time to discuss today’s announcement.   Investors can access the conference via the Internet at http://investor.allscripts.com.  Participants also may access the conference call by dialing (877) 303-0543 (toll free in the US) or (973) 935-8787 (international) and requesting Conference ID #83012880.

A replay of the call will be available two hours after the conclusion of the call, for a period of four weeks, at http://www.allscripts.com or by calling (855) 859-2056 or (404) 537-3406 – Conference ID #83012880.

About Allscripts

Allscripts (NASDAQ: MDRX) delivers the insights that healthcare providers require to generate world-class outcomes. The company’s Electronic Health Record, practice management and other clinical, revenue cycle, connectivity and information solutions create a Connected Community of Health™ for physicians, hospitals and post-acute organizations.  To learn more about Allscripts, please visit www.allscripts.com, Twitter, YouTube and It Takes A Community: The Allscripts Blog.

 

Full disclosure: I serve on the advisory board of Health eVillages with Tullman. I have had no contact with him regarding his fate at Allscripts or the company’s recent troubles.

 

December 19, 2012 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Video: Merge Healthcare

Other locales may get more press in this industry,  but the Chicago area has a surprisingly strong community of health IT vendors.

It is well known that Allscripts is headquartered at the Merchandise Mart. GE Healthcare, while based just outside Milwaukee, maintains a large IT center in northwest suburban Barrington, Ill. CDW, based in Vernon Hills, Ill., runs its healthcare division from a downtown Chicago office. Numerous smaller vendors dot the area, too. And then there is Merge Healthcare, a medium-sized firm that historically has specialized in software for medical imaging.

Last week, I visited Merge’s home office in the Aon Center, an iconic skyscraper previously known as the Amoco Building and, before that, the Standard Oil Building. There, CEO Jeff Surges gave me a history of the company and talked about changes in the company and in the health IT field in general. Then, I turned on my video camera so Surges, sporting an orange necktie, could explain why Merge has adopted orange as its company color.

Following my interview with the CEO, Gilbert Gagné, also wearing an orange tie, gave me a demo of Merge iConnect Access, an image viewing system than works through any Web browser. I got the iPad portion of the demo on video, too.

I shot this in 720p high definition, but only uploaded it at 360p to save time. Let me know if you want HD so the iPad screen appears a little sharper.

January 8, 2012 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Poll for new national coordinator is rather laughable

Leave it to those in the ivory tower of Modern Healthcare to screw up something as simple as an unscientific poll about who should be the next national coordinator for health IT.  The poll lists a whopping two dozen names, ranging from the obvious—Dr. John Halamka, Dr. Paul Tang, current deputy national coordinator Dr. Farzad Mostashari—to the dark horse—Dr. Robert Hitchcock of T-System, Paula Gregory of the “Philadelphia College of Osteopathic Medicince” (sic)—and even a few laughable listings.

For one thing, Dr. David Brailer is on the list. The first national coordinator (2004-06) left Washington because he wanted to be with his family in San Francisco. He’s currently running a $700 million equity investment firm and couldn’t possibly want to get back into the political game, could he? Besides, he’s a Republican. Dr. William Hersh, CMIO of Oregon Health and Science University, would make a good choice, but he’s already said he doesn’t want the job.

Another choice is current CMS Adminstrator Dr. Donald Berwick. Dirty politics is about to force him out, and if that happens, you can bet he won’t want to be within 400 miles of Washington. (Hey, that just happens to be the distance to his home in the Boston area.) I’m really steamed about the Berwick situation, and am preparing  a separate post that hopefully will go up tomorrow.

Modern Healthcare also includes Janet Marchibroda, who’s identified as chief healthcare officer of IBM. Sorry, but Marchibroda, former CEO of the eHealth Initiative, left IBM last year. My sources tell me she’s now working at ONC, serving as de facto chief of staff to current coordinator Dr. David Blumenthal. (Blumenthal, as you no doubt know, is leaving in April.)

Missing from the long list of names is Johns Hopkins CIO Stephanie Reel, who won in a landslide the equally informal, unscientific poll that HIStalk ran a couple weeks ago. HIStalk did report, though, that Allscripts effectively stuffed the ballot box. Also not included is Blumenthal’s predecessor, Dr. Robert Kolodner, but he doesn’t want to go back, either.

I’m not going to run another survey here (hey, I doubt I have the readership to make it worthwhile anyway), but I’m curious if people think a non-physician could or should be national coordinator.

March 10, 2011 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Early HIMSS news

HIMSS09 doesn’t officially start until Sunday, but the announcements already are starting to come fast and furious:

First off, you may have already heard the news that Pamela Pure is out as president of McKesson‘s Technology Solutions division. The company’s planned media briefing at HIMSS on Monday now will be led by Sunny Sanyal, chief operating officer of the IT division.

In other executive news, the recently re-named Surescripts—formerly SureScripts-RxHub—has hired Harry Totonis as president and CEO. Totonis previously led the analytics division of MasterCard Worldwide and was a senior partner at Booz Allen Hamilton.

I expect that this experience running an analytics operation might give pause to the privacy and anti-data-mining camps. Surescripts and the rest of the e-prescribing industry may have to completely overhaul some of their policies in light of the forthcoming new HIPAA regulations called for in the stimulus legislation.

By the way, Surescripts says previous co-CEOs JP Little and Rick Ratliff will remain with the company in undisclosed roles.

Medsphere announced that it will debut OV Meds, the first of a series of modular upgrades to the OpenVista 2.0 EHR. OV Meds includes medication reconciliation technology, a pharmacy dashboard, a drug-pricing engine and a patient drug information library.

I don’t want to get bogged down in contract “wins” for vendors because I’ll never get anything else done, but I’ll mention that Allscripts announced its first end-to-end sale of technology for a hospital, physician offices, emergency department and home care. The customer is 118-bed Ottawa (Ill.) Regional Hospital and Healthcare Center.

April 2, 2009 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

More on Allscripts—and the fight over data

Earlier today, I posted news about Allscripts-Misys Healthcare Solutions intending to sell its Medication Services division to an unnamed purchaser for an unspecified amount. I’ve since gotten clarification via e-mail from company spokesman Todd Stein:

“The release is earlier than we would normally have liked because we’re required to reveal all material non-public information about the company prior to undertaking a share repurchase program like the one we also announced yesterday. That’s to ensure that shareholders know everything about the company that they need to know in order to make an informed buy-or-sell decision.”

Indeed, Allscripts announced yesterday a $150 million buyback program and related $150 million increase in its credit commitments.

The company also was named in a Bloomberg story today as one of three firms leading the fight over whether to include greater privacy protections than HIPAA currently affords in the $20 billion health IT section of the economic stimulus legislation. Privacy advocates, including Dr. Deborah Peel’s Patient Privacy Rights Foundation and the American Civil Liberties Union, favor the House version. Business groups, including IT vendors, pharmacy benefit managers and the pharmaceutical industry, prefer the Senate version that allows data mining and direct-to-consumer marketing to continue.

For the record, the other companies named as possible major beneficiaries of the legislation are athenahealth and Quality Systems, the publicly traded parent company of NextGen Healthcare Information Systems.

How do I know this story is a Big Deal? Peel and her cohorts have been very active in keeping the media up to date on developments on Capitol Hill the last couple of weeks, knowing that this could be the last chance for another decade or more to change existing healthcare privacy laws and practices.

February 11, 2009 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Allscripts to sell drug-packaging division, but who’s the buyer?

Allscripts-Misys Healthcare Solutions today announced an agreement in principle to sell one of its oldest assets, the Medication Services division. But the press release left out one minor detail: the name of the proposed buyer.

I’ve got a request in to the company, but if anyone else has any information, I’d love to hear it.

Allscripts has been prepackaging prescription drugs from its Libertyville, Ill., pharmacy facility (and former corporate headquarters building) for longer than it’s been selling electronic medical records, but medication services no longer is the central focus of the company.

“The proposed sale of our Medication Services business increases our focus on our core healthcare information technology businesses at a time when we expect electronic health records and electronic prescribing, along with our interoperability and connectivity efforts, to receive a substantial boost from the federal economic stimulus package,” CEO Glen Tullman said in the press release.

Allscripts says it will continue offering medication services through a co-marketing agreement. But, again, we don’t know who the company will be co-marketing with.

I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.